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Canada’s main stock index rose to a record high on Tuesday, led by technology and cannabis stocks, as investors bet that earnings season would be supportive of the market even as the earnings growth rate starts to slow.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 101.62 points, or 0.5%, at 21,086.99, a record closing high.

Canadian National Railway Co reported third quarter results after the close, while some other major stocks are due to report over the coming days. CN Rail, in announcing its earnings, said CEO Jean-Jacques Ruest will retire at the end of January, following investor demands for his exit after the railroad operator’s failed bid for Kansas City Southern. U.S. shares of the railway rose 4.5% in post-market trading.

“The markets are going to be looking much more through some of the headline risk to the underlying fundamentals of the individual companies and sectors,” said Kevin Headland, senior investment strategist at Manulife Investment Management.

“Perhaps the earnings growth rate is starting to slow, but it still remains quite strong and positive.”

The technology group climbed 1.1% on Tuesday, led by a 13.4% jump in the shares of Blackberry Ltd. Healthcare was up 6.6%, including sharp gains for some cannabis producers.

After snapping a seven-month winning streak in September, the Canadian equity index has gained 5.1% so far this month, aided by strength in commodity prices.

U.S. crude oil futures settled 0.6% higher at $82.96 a barrel as an energy supply crunch continued across the globe.

The energy group rose 0.4%, while the heavily weighted financial services group advanced 0.5% as bond yields climbed.

U.S. stock indexes also closed higher on Tuesday with the biggest boosts from the technology and health-care sectors as investors appeared to bet on solid quarterly reports even as some worried that it was too early to celebrate.

In its fifth straight session of gains, the benchmark S&P 500 index finished just 0.4% below its early September record close while the Dow Jones Industrials average ended the day about 0.5% below its record reached in mid-August.

Johnson & Johnson’s shares added 2.3% providing a big boost to the S&P 500 after it raised its 2021 adjusted profit forecast. Insurer Travelers Cos Inc climbed 1.6% after beating its profit estimates.

High-profile technology and communications companies were also big S&P boosts with Apple Inc, Facebook and Microsoft all rising.

But in the second week of earnings with a “very small sample” of releases, Steve Sosnick, chief strategist at Interactive Brokers, worried about a possible pullback.

“We’re seeing volatility measures like the VIX flipping from nervous to complacent in a really short period of time,” said Sosnick. “We may be a bit ahead of ourselves. The mostly likely scenario is that we make one more run at new S&P highs and then we pull back, subject to earnings.”

The CBOE market volatility index fell 0.6 points after earlier hitting 15.57, its lowest level since mid-August.

Analysts now expect S&P 500 earnings to rise 32.4% from a year earlier, according to Refinitiv data.

“The key for the market to going up from here will not be higher multiples, it will have to be higher earnings. That’s why it’s so important to pay attention to what those profit margins do going forward and what the trajectory of GDP looks like,” said Eric Marshall, portfolio manager at Hodges Funds.

“Investors will be paying very close attention to pricing power, how companies are dealing with labour shortages and inflationary cost pressures within their business.”

The Dow Jones Industrial Average rose 198.7 points, or 0.56%, to 35,457.31, the S&P 500 gained 33.17 points, or 0.74%, to 4,519.63 and the Nasdaq Composite added 107.28 points, or 0.71%, to 15,129.09.

Ten of the eleven major S&P 500 sectors closed higher, with healthcare stocks, up 1.3% after dropping 0.7% in Monday’s session. The next biggest gainer was utilities , which rose 1.26% after falling almost 1% Monday.

Netflix Inc, after closing up 0.2%, added slightly to gains after the bell when quarterly results showed that global interest in Korean thriller “Squid Game” lured more new customers than expected.

Tesla Inc, which closed down 0.7%, is due to release results on Wednesday, with investors watching for indications of its performance in China.

Procter & Gamble Co, fell 1% during the session, after it warned that it would have to raise prices of some products to counter higher commodity and freight costs.

However, Walmart Inc shares added 2% after being added to Goldman Sachs “Americas Conviction List.”

Helping the healthcare sector on Tuesday was drugmaker Merck & Co Inc, which rose 3% while Pfizer Inc climbed 1.9% following the release of a competitor’s COVID-19 drug study results.

Its competitor, Atea Pharmaceuticals Inc, fell 66% after the company’s antiviral pill, being developed with Roche , failed to help patients with mild and moderate COVID-19.

Advancing issues outnumbered declining ones on the NYSE by a 1.51-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favored advancers.

The S&P 500 posted 44 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 72 new highs and 69 new lows.

On U.S. exchanges 9.5 billion shares changed hands compared with the 10.29 billion moving average for the last 20 sessions.

Reuters, Globe staff

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